Santa Fe, NM – The Office of Superintendent of Insurance recently announced that for the third year in a row, New Mexico employers could see a key portion of their workers’ compensation costs drop by an average of 16% in 2018, after 2016 and 2017 reflected decreases of 6% and 9% respectively.
The decrease in pure premium (the portion of the premium employers pay insurers to cover claims costs for job-related injuries and deaths) is based on a recommendation from the Florida-based National Council on Compensation Insurance Inc. (NCCI), which analyzes industry trends and prepares rate recommendations for the majority of states. Pure premium reflects only a portion of workers’ compensation costs but is the key factor behind annual cost changes.
“This continued positive trend of decreased loss costs for workers’ compensation rates supports New Mexico’s businesses and keeps workers protected,” Superintendent John G. Franchini remarked. “This development reflects the hard work of employers, employees, and care providers alike to keep claims and costs down.”
Workers’ compensation pays injured workers for lost wages and medical care for job-related injuries. An improvement in average medical care costs and wage replacement costs are key factors continuing to drive down the pure premium.
The decrease is an average, so an individual employer may see a larger decrease, no change, or even an increase depending on the employer’s industry, claims experience, and payroll. Also, pure premium does not take into account the varying expenses and profit of insurance companies. The
decrease in the pure premium is effective January 1, 2018, and employers will see the changes when they renew their policies in 2018.
“I applaud employers and employees alike for their dedication to a safe workplace in these difficult economic times which will allow for the 16% loss cost rate deduction. This decrease in workers’ compensation spending supports our economy allowing for lower overhead and greater job growth
potential for New Mexico businesses.”
Source: NM Superintendent of Insurance